SAN JOSE, Calif. – "The solar panel business is all going to China," said Valdis Dunis, a long time entrepreneur and friend.
It was July and we were having coffee in one of Hong Kong's snazzy upscale hotels. I was on my way to Taipei to write about Windows 8 on ARM and fabless IP companies, so I was just storing away his comments to a place somewhere in the far back of my mental filing cabinet.
Yesterday when Silicon Valley's clean tech icon Solyndra publically crashed and burned, Valdis' comments flooded back to the forefront of my mind.
As usual, Valdis' opinions were well informed. He had been working for some time as the founder of Solar Cities Asia, assembling the business plan for a company that aimed to be a leader in rooftop solar installations in this sun-drenched region.
Much of Valdis' time recently had been devoted to pouring over complex financing issues. He was jazzed he had found a way to make the numbers for installing rooftop solar on commercial buildings very compelling, essentially using creative ways a lowered utility bill could be factored into the equation of amortizing the hardware.
I got the impression the solar rooftop business was all about how you ran the numbers, including what government incentives were available. But Valdis is an engineer at heart, so he kept a keen eye on the technology as well.
He had watched China sources of mainstream crystalline solar panels ramp up in volume and down in price over the last year or so. He was very curious about TSMC's plans for solar panels based on CIGS technology. He encouraged me to research how the initiative was going and expressed skepticism even they could master the complex technology behind it.
I didn't make the connection those giant Solyndra fabs along I-880 back in Fremont, Calif., were using similar technology and were in a similarly dicey position. But it didn't take long for market realities to catch up to what Valdis had already concluded.
Word is China has given away tens of billions of dollars to help its local manufacturers step on the gas in mainstream crystalline technology, essentially buying market share in solar. They were following the pattern set by Samsung and LG in DRAMs and LCDs a generation ago.
These days the big U.S. and Japan memory and display makers are consolidating to catch up with Korea's giants. Similarly a solar shakeout seems to be here in the wake of the rising China juggernaut Valdis saw coming months ago.
CIGS, thin-films and other solar technologies still have plenty of promise. Efficiencies of solar cells are abysmally low. A new approach could offer a performance breakthrough to leapfrog China in the market--someday.
But that technology is not here today. The lesson of Solyndra, experts say, is solar alternatives deserve private and public funding at the level of lab research to pave the way for next-generation breakthroughs, but crystalline is the bet to make in mainstream manufacturing. It is edging toward the dollar/Watt sweet spot and its competitors don't seem to be close at the moment.
U.S. investors love to bet on leapfrog technologies that will become the next big thing. But in solar China appears to have a smarter approach at this stage of just out-producing everyone in what the market wants today.
I am headed back to Taipei shortly and thinking maybe this time I really ought to check into TSMC's solar plans. They may be digging in Hsinchu the next big hole in a consolidating solar industry.